In March 2013, many were bemoaning the job market condition of hedge funds in Asia. The situation was not looking good, without any great promise expected for the near future. Much of the issue had to do with insufficient liquidity in banks to engage in investment activities that move large amounts of money and positions. As a result, the Asian hedge fund market was looking a bit like a desert with too many fund managers and staff chasing after too few opportunities with clients. According to Bloomberg Magazine, a number of industry veterans were deciding enough was enough, and it was time to seek a different career path. August seems to be signaling a potential turnaround, however, as investors may be returning to Asian hedge funds.
No surprise, much of the Asian hedge fund trouble started in 2008 with the global financial crash. Asian banks took hard losses, just like others, and are still trying to recover the value of assets from that period prior to the fall. To understand how bad the hiring picture was in the March 2013 Asian market, one simply needs to look at the contraction that occurred among market players. Two hundred ninety-six Asian hedge funds collapsed or liquidated and went off the grid by December 2012. Those who remained faced increased regulatory compliance, far pickier clients demanding better performance, a resistance to fees, and more competition. The formula meant a highly unpredictable career path for remaining fund managers. Where Asian hedge funds represented 9 percent of the fund market in 2007, they now make up 7 percent, having suffered almost $50 billion in losses. Finally, a nepotism investigation by U.S. authorities on Asian hedge fund hiring is not helping matters.
Given the above circumstances, candidates have already seen the writing on the wall and have given up on grabbing a flying-high hedge fund manager job. Instead, they are settling for far more stable positions in banks themselves or with more boring funds that don’t go after high risk investment returns. Further, Asian markets are being flooded with European traders looking elsewhere to find jobs. Thirty percent of hires in March are more than willing to jump borders and relocate to land a trading job. Job loss and tax increases in Europe have been driving job seekers to migrate elsewhere in a global market. In 2013 alone the British market was expected to liquidate 43,000 jobs.
Many are hoping that the opening of hedge fund investing in China as well as signs of growing activity in Asia in general will boost spirits and revenue streams again. Wells Fargo has been expanding operations in efforts to get back into the Asian market game. Some moves like J.P. Morgan’s raiding of USB’s senior Asian prime broker are being seen as potential signs of markets heating up again as well.
However, for the average job seeker, these changes are insufficient to represent a widescale market change and job opportunity increase. They could very well be seen as simply a reshuffling of the existing competition deck instead.